Punjab

StateCommission

A/562/2018

Indusind Bank Ltd. - Complainant(s)

Versus

Roshan lal - Opp.Party(s)

Devinder Singh Soundh and arun jangra

25 Mar 2019

ORDER

                                                     FIRST ADDITIONAL BENCH

 

 

STATE  CONSUMER  DISPUTES  REDRESSAL COMMISSION,  PUNJAB

          SECTOR 37-A, DAKSHIN MARG, CHANDIGARH

 

                   First Appeal No.562 of 2018

 

                                                          Date of Institution   : 05.10.2018        

                                                               Order Reserved on :18.03.2019

                                                          Date of Decision     : 25.03.2019

 

1. INDUSIND BANK LTD., Guru Kanshi Marg, G.T Road, Bathinda through its Branch Manager/Branch Head.

 

2. INDUSIND BANK LTD, Mandir Wali Gali, 12 Hattan Chowk, Mansa through its Branch Manager/Branch Head, Now Corporate office at 115, 116, G.N Chetty Road,T.Nagar, Chennai 6000017.

 

                                                                 ..Appellants/Opposite parties         

                   Versus

 

          Roshan Lal aged about 45 years son of PremCand, resident of H.No. 308, Village Patti Sawal Mehraj, Tehsil Phul, District Bathinda, Punjab.

 

                                                          …..Respondent/Complainant

 

First Appeal against order dated 25.07.2018 passed by the District Consumer Disputes Redressal Forum,  Bathinda.

Quorum:-

          Shri J. S. Klar, Presiding Judicial Member

             Sh.Rajinder Goyal, Member.

Present:-

          For the appellants                  :   Sh.D.S Soundh, Advocate

          For the respondent               :   Sh.N.S Sidhu, Advocate

         

          . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

J.S KLAR, PRESIDING JUDICIAL MEMBER :-

         

                    Challenge in this appeal by appellant is to order dated 25.07.2018 of District Consumer Disputes Redressal Forum Bathinda, directing the appellants of this appeal to pay the amount of Rs.10000/- as cost for withholding the NOC to respondent of this appeal. The respondent of this appeal is complainant in the complaint and appellants of this appeal are opposite parties therein before District Forum Bathinda and they be referred as such hereinafter for the sake of convenience.

2.                The complainant/Roshan Lal has filed the complaint U/s 12 of the Consumer Protection Act, 1986 (in short, "the Act") against OPs on the averments, he purchased TATA Truck 4018 bearing registration no.PB-19E-5797 for earning his livelihood for himself and his family with the financial assistance of OPs, vide agreement no.PBB00554D dated 27.01.2014 for a sum of Rs.4,22,000/- for the above vehicle. The said vehicle was hypothecated with OPs for financing it  and hypothecation clause was duly incorporated in the registration certificate. The complainant agreed to repay the loan amount of Rs.4,22,000/- to OPs along with interest by way of 36 monthly installments as per loan agreement. The complainant has been regularly paying the amount of installments to OPs from time to time and cleared the loan amount on 08.08.2016 to OPs for purchase of above referred vehicle. The complainant requested OPs to issue requisite No Due Certificate in his favour regarding above said loan account, but OPs did not issue NOC in his favour till date. OPs neither issued NOC to complainant nor returned the blank cheques taken as security from him with other documents just to harass the complainant. The complainant has alleged deficiency in service on the part of OPs in not supplying NOC for clearance of loan amount of the vehicle to him. The complainant prayed for a direction to OPs to issue NOC for clearance of loan amount of the hypothecated vehicle to him and also to return the blank cheques signed by him as security cheques, besides compensation of Rs.50,000/- for mental harassment and Rs.20,000/- as cost of litigation.

3.                Upon notice, OPs appeared and filed written reply and contested the complaint of the complainant by raising preliminary objections that  complainant purchased the vehicle for the purpose of generating profits and not for earning his livelihood and of his family with the financial assistance provided by OPs/Bank. The complainant is not consumer of OPs. The complainant is big transporter having more than 5 trucks in his transport business and at least 10 employees including driver, helpers, conductor and a munshi are in his employment. He is guarantor in Truck loan obtained from OPs by one Randhir Singh son of Harbans Singh resident of Village Mehraj Patti Sawal against Mahindra HN-40 goods 40.2 Ton capacity big truck, vide loan agreement no.PJB00335-D. He along with executants signed both agreements as guarantor and other executants to the tune of Rs.7,43,660/- towards payment of loan amount of that Randhir Singh.  Roshan Lal /complainant being guarantor is equally liable to pay aforesaid loan amount along with borrower Randhir Singh jointly and severally with regard to truck loan obtained from OPs by Randhir Singh  son of Harbans Singh. The balance amount is still unpaid by Randhir Singh, whereof complainant is guarantor. As per clause 20.0, 20.1, 20.2, RBI Guidelines  contained in 4.2.27 issued on 09.09.2014 and as per provision of Contract Act , OPs have right to recover the entire sum of balance loan amount either from principal borrower or from guarantor. Withholding of NOC by OPs on account of non-clearance of loan by Randhir Singh, wherein complainant is guarantor is valid reason to do so. The complainant also took loan of three other trucks from Cholamandlam Investment & Finance Company Ltd  Chennai  with Branch Office at Bathinda with regard to Truck TATA LPT 2515 bearing registration no.HR-38-E-8614, TATA HCV/LPT 2515 Truck bearing registration no. PB03-H-6527 and TATA LPS-3516 Truck bearing registration no.PB03-M-9778 by obtaining loan of Rs.4,50,000/-, Rs.3,55,150/- and Rs.6,15,000/- respectively and also executed loan agreements in that regard. The complainant is big transporter and deals in commercial activities to generate profits and is not a consumer of OPs. OPs vehemently asserted that since he is guarantor of Randhir Singh in his above outstanding loan to OPs, hence OPs are justified in withholding the NOC of the complainant. Rest of the averments of the complainants were denied by OPs even on merits and they prayed for dismissal of the complaint.

4.                The complainant tendered in evidence his affidavit  Ex.C-8 along with copies of documents Ex.C-1 to Ex.C-7 and closed the evidence. As against It; OPs tendered in evidence affidavit of Robin Arora as Ex.OP-1/1 along with copies of documents Ex.OP-1/2 to Ex.OP-1/10 and closed the evidence. On conclusion of evidence and arguments, the District Consumer Forum Bathinda partly accepted the complaint of the  complainant by virtue of order dated 25.07.2018. Aggrieved by above order of the District Forum Bathinda, opposite parties now appellants have carried this appeal against the same.

5.                We have heard learned counsel for the parties and have also examined the record of the case.

6.                The simple point arising for adjudication in this appeal before us, is whether appellants can exercise their lien over NOC and other documents of Roshan Lal complainant after clearance of loan taken by him. The case of appellants/Bank is that since Roshan Lal complainant also stood guarantor or co-borrower, whatever the case may be with one Randhir Singh for his loan case, therefore, bank is justified in exercising  general lien in withholding his NOC and other documents despite clearance of loan amount by him under Section 171 of Contract Act. This is the only principal point for adjudication in this case before us. There is no dispute of this fact that complainant obtained loan from OPs/Bank for purchase of truck and loan amount has since been cleared by him to the financer/OPs Bank. OPs/Bank has not provided NOC towards clearance of loan amount to him for deletion of hypothecation entry in the registration certificate of the vehicle by the Registering Authority and also withheld his other documents. The defence of the OPs/Bank is that since he was co-borrower/guarantor of Randhir Singh in other loan, vide loan agreement Ex.OP-4, which is still outstanding to OPs and as such, OPs/Bank under the general lien exercised by it under Section 171 of Contract Act has withheld his NOC and other loan documents. Upon loan agreement Ex.OP-4 of Randhir Singh, wherein complainant is co-borrower and submitted that as per clause 20.1 of loan agreement Ex.OP-4,  the lender shall have lien over all the assets of the borrower(s)/co-borrower(s) in the lender’s control and a right of set off against any monies dues to the lender from the borrower/co-borrower(s) and to combine all accounts of the borrower(s)/co-borrower(s) for recovery of the lender’s dues hereunder. Similarly, reliance is placed in Clause 20.02 of loan agreement Ex.OP-4 of Randhir Singh that the event of default in payment of installments/charges/fees, without prejudice to the right of termination, the lender shall have the right to set off all monies, securities, deposits, other assets and properties of the borrower’s/co-borrowers held by the lender as secured asset, against the amount in respect of which the detail has been committed under this Agreement or any other agreement. The counsel for OPs relied upon statement of account Ex.OP-1/9 of Roshan Lal to the effect that loan amount is still outstanding against him to the Bank, wherein complainant has been shown as co-borrower. His loan amount has cleared for purchasing the truck by him to OPs. The counsel for OPs has also not disputed this fact. The bone of contention boils down on this point as to whether OPs/Bank in withholding issuance of NOC and other documents of complainant for outstanding loan, wherein complainant is either guarantor or co-borrower therein. The liability of guarantor is also co-extensive with principal borrower under Section 128 of the Contract Act. The counsel for appellants relied upon Section 171 of Contract Act 1872 to contend that NOC for clearance of loan amount of complainant has been withheld by bank with regard to outstanding loan amount, wherein complainant is co-borrower. OPs averred in their pleadings that complainant is a guarantor, whereas in the loan agreement,  he has been shown to be co-borrower.  Whatever the case may, the liability of guarantor and co-borrower extends with the principal borrower of the loaner. The simple proposition for adjudication before us is whether OPs/Bank can exercise his general lien under Section 171 of the Contract Act with regard to the outstanding loan amount of Randhir Singh,  wherein complainant is either guarantor or his co-borrower. We find that Orissa High Court has dealt with this point in Alekha Sahoo versus Puri Urban Co-operative Bank Ltd and others reported in AIR 2004 Page 142-143,  wherein it has been held that “Bank did not return gold ornaments in spite of repayment of gold loan by petitioner on ground that he was guarantor in respect of cash credit loan. Particular bye-law and Rules of Bank allowing it to retain gold ornaments of guarantor for loan amount of debtor was not produced. Once loans had been repaid by guarantor, Bank cannot retain his gold ornaments.” The ratio of authority is that, if loan amount has been paid, the general lien without express rules cannot be exercised with regard to the point that he also stood as guarantor for cash credit loan advanced to the debtor. In this view of the matter, we find that as per ratio of law laid down by Orissa High Court (supra) after clearance of loan amount, bank cannot exercise general lien under Section 171 of the Contract Act in the absence of any specific bye-laws or rules to that effect. OPs pleaded the complainant to be guarantor in the case of Randhir Singh, whereas they led evidence that he is co-borrower with Randhir Singh which is contradictory to the pleaded case. On the above referred law, we find that District Forum Bathinda passed the correct order in this case holding deficiency in service on the part of OPs now appellants.

7.                In the light of our above discussion, we find no merit in the appeal and same is hereby dismissed.

8.                The appellants had deposited the amount of Rs.5,000/-with this Commission at the time of filing of the appeal. This amount with interest, which accrued thereon, if any, be remitted by the registry to the respondent of this appeal being complainant  by way of a crossed cheque / demand draft after the expiry of 45 days, subject to stay order if any. Remaining amount, if any, due shall also be paid to complainant by the appellants within 45 days from receipt of the copy of this order

9.                Arguments in this appeal were heard on 18.03.2019 and the order was reserved. Certified copies of the order be communicated to the parties as per rules.

10.              The appeal could not be decided within the statutory period due to heavy pendency of court cases.

 

                                                                       (J. S. KLAR)

                                                          PRESIDING JUDICIAL MEMBER

 

                                                          (RAJINDER KUMAR GOYAL)

                                                                         MEMBER

                    

                                                                  

March 25, 2019                                                          

(ravi)